Today’s episode is brought to you by ExternalIT, a leading provider of cloud solutions to the wealth management industry, With the recent integration of Microsoft Office 365, you can enhance the familiar tools of Word, Outlook and Excel with an extensive range of apps including VoIP communication, on-line meetings, collaboration, business intelligence, and more.

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[Today’s top story comes from LPL Financial, as the nation’s largest broker-dealer, oh, thank you disclosure, held its annual LPL Focus conference in Boston last week.On the technology side, LPL announced it will soon introduce its own an automated investment service, cough robo-advisor, consisting of low-cost ETF portfolios powered by LPL’s research. No details on pricing or even a name for the solution were provided, but LPL president Dan Arnold did say that a pilot program with about 20 advisors will be begin in the next few months.

LPL also announced the launch of its Vendor Affinity Program, calling it “a centralized repository” of vendors that offer discounted pricing to LPL advisors for their products and services. LPL is launching the Vendor Affinity Program with over 50 vendors from the get-go, with discounts ranging anywhere from 10 percent to 80 percent off retail pricing.

Now if you’re not affiliated with LPL Financial, don’t get too discouraged. Vendors don’t get to be included in the affinity program simply by offering a discount; vendors must also meet certain security and compliance requirements imposed by LPL, so this is the takeaway for you. If you’re not really sure a technology vendor will meet the standards for your own business, you can be more confident in those vendors who have passed muster with LPL by meeting some pretty high standards.

As far as who is in the affinity program? I couldn’t reach anyone at LPL in time before filming this episode to get that list, but some detective work on Google should yield a list of usual suspects who’ve issued press releases regarding their inclusion into the program.] LPL Financial LLC, the nation’s largest independent broker-dealer, a custodian for registered investment advisors (RIAs), and a wholly owned subsidiary of LPL Financial Holdings Inc., today announced the launch of its Vendor Affinity Program, a new initiative designed to help advisors reduce the complexity and costs of running their businesses.

[Next up is news from CRM provider Wealthbox, as the company announced a new integration with Slack, a wildly-popular online collaboration tool. “What is Slack?” you ask.

I’d rather not make a comparison to email, but, Slack is like email on steroids. But instead of collaborating via back-and-forth email threads, Slack lets you use real-time chat, aka messaging, to work with your team using Channels centered around certain topics, connect privately with colleagues using direct messages , or set up private groups with just a few team members to work on top secret tasks.

With the new Slack integration, Wealthbox users can select from 22 different notification types to automatically push into Slack, helping everyone in the firm stay informed on day-to-day activities. And with the Slack feed on your favorite mobile device, you should be able to stay in the loop on all sorts of tasks in your office no matter where you are.

And one last thing: since Slack can be used to chat about clients, and potentially WITH clients, you’ll need the Slack Plus plan that’s around $15 per month per user that includes compliance exports of all your message so you keep your compliance officer happy.] Wealthbox CRM, an activity stream-based client relationship management app for wealth management firms, has announced an integration with Slack, the messaging app for business teams.

[And finally, this week’s episode wraps up with news from Smarsh, the archiving solution provider, as the company introduced enhanced archiving support for Microsoft Office 365 environments. As more of you move away from local servers to the cloud, you still need to fulfill your compliance and record-keeping obligations required by FINRA and the SEC.

By all accounts, Microsoft is moving full-steam ahead on cloud services, so it’s pretty much inevitable that as long as you want to keep using Word, Excel, Outlook and more, you’ll need to incorporate a compliance solution for the resources you manage in the cloud. In addition to archiving Office 365 email, the Smarsh solution can also capture content on Yammer as well as Skype for Business Online, formerly called Lync, which is Microsoft’s attempt to compete with Slack that I mention, oh, about a minute ago.] Smarsh®, the leading provider of cloud-based comprehensive archiving solutions for compliance and e-discovery, today announced enhanced archiving support for electronic communications within Microsoft Office 365 environments.

Riskalyze announces the launch of Compliance Cloud for broker-dealers and large RIAs

Riskalyze Compliance Cloud aims to single out portfolios that drift outside a client’s risk tolerance

In a press release today, Riskalyze, the provider of client risk tolerance quantification tools, announced the anticipated launch of Compliance Cloud, a utility that identifies portfolios that are outside their risk tolerance ranges established for individual investors.

Compliance Cloud was first announced by Riskalyze CEO Aaron Klein at the Laser App 2014 conference last month in San Diego. Today’s press release sheds additional light on the benefits Compliance Cloud offers to its institutional users.

Pinpoint Risk

Compliance Cloud aims to reduce the number of unsuitable portfolio allocations applied to client accounts by automatically screening allocations advisors establish for clients and compares the amount of risk in each portfolio with each client’s risk score (likely the Risk Number™ generated by a Riskalyze assessment).

Any portfolios found to significantly exceed the client’s risk tolerance (or be significantly below) will be flagged by Compliance Cloud for further review. Not only is this automated risk scanning useful to individual advisers and broker-dealer representatives, Compliance Cloud will be a welcome feature for any institutional compliance officer responsible for oversight on thousands of the institution’s representatives.

‘Big Data’ for broker-dealers and institutions

Compliance Cloud is intended for use by broker-dealers and large registered investment advisory firms. Once again, these institutions typically have oversight over thousands, and potentially millions, of investor accounts, and manually identifying risk characteristics of investor portfolios is costly and inefficient.

Riskalyze takes advantage of the general adoption of “big data,” where useful insight and information is extracted by processing large volumes of disparate data spread across multiple systems. In Compliance Cloud, Riskalyze uses risk analytics obtained from millions of individual client portfolios and compares the data with risk tolerance data identified during the client data gathering and on-boarding process.

Historically, financial institutions and compliance officers lacked the tools to programmatically assess millions of holdings each day. Instead, client portfolios were selected at random and then spot-checked against the client’s (often incomplete or outdated) risk tolerance information.

Orion Advisor Services Integration

According to the Klein, Compliance Cloud has been in beta testing for several months with the general release of the product anticipated in October this year. In addition, Orion Advisor Services, the nation’s largest privately held portfolio accounting service bureau, was identified by Riskalyze as “the premier launch partner” of the Compliance Cloud solution.

Compliance Cloud will be made available directly to Orion Advisor Services’ RIA clients where advisers can take advantage of the integration of reconciled portfolio accounting data, avoiding duplicate or manual entry of client holding information into Compliance Cloud.

Pricing for Compliance Cloud was not disclosed in the company press release, so check back in here at FPPad for more updates as this product enters the market.

[This is a last-minute addition to this week’s Bits and Bytes. Here’s a personal story from Commonwealth’s Justin Unton about a robbery at his house and the theft of a bunch of his electronics. Unton strongly advocates the use of two-factor authentication (see: How to enable two-step verification on your LinkedIn account) which renders these devices and online logins useless without access Unton’s mobile phone. Let this be a lesson to us all: turn on two factor authentication wherever you can to give yourself an additional layer of protection in the event something like this happens to you.] At first, we thought it was our cat, Oscar, who had caused the mass destruction in our living room. We even laughed it off, thinking that he must have seen a fly and done his best puma impression to track it down and pounce on it. That all changed as we went down the hallway to our bedroom and saw the contents of our drawers strewn about the floor.

[I think it’s generally common sense to equate the use of integrated software tools with increased profitability. But just in case you have your doubts, here’s a white paper compiled from an Aite Group survey that demonstrates this fact. So what is “some degree” of technology integration? The white paper says it’s single sign-on, manual data sharing, automatic data sharing, and cross-product functionality. Want a copy of the white paper? Visit http://tamaracinc.com/White-Paper-Download.aspx and offer your contact information.] Envestnet | Tamarac, part of Envestnet, Inc., a leading provider of integrated web-based portfolio and client management software for independent advisors and wealth managers, has released a white paper showing that financial advisors at independent RIA practices with some degree of technology integration earn approximately 20 percent more in annual income than their counterparts at independent RIA practices with no technology integration.

[Smarsh routinely appears on FPPad for email and social media compliance. Clearly they’re a popular service provider among their regulated financial service customers, and that popularity has resulted in dramatic growth of what was once a small start up in the Pacific Northwest.] Companies used to wish away their old correspondence. Old letters were a legal liability, the thinking went, and ought to be destroyed. Smarsh has built one of Portland’s fastest-growing tech businesses by taking the opposite approach, contending that in the information age nothing is ever really gone.

[This is a sidebar to the Smarsh article above, but I felt it important enough to break it out separately. Did you know Dell, yes, that Dell, now owns 60 percent of Smarsh? I didn’t either. That news managed to fly under my radar.] Companies that produce the kind of growth that Smarsh has inevitably attract suitors. But don’t look for a buyout at Smarsh: It’s already happened.

[Surprise, surprise, FINRA is checking broker-dealer rep’s use of social media! It’s not breaking news, FINRA is doing what they’re supposed to be doing; their job! Still, if these spot-checks scare you, here’s what you need to have: 1) A compliance manual that includes your social media policy, 2) documentation that reps are periodically trained, and 3) a monitoring and archiving system that contains the history of social media posts. Is there anything I left out?] The Financial Industry Regulatory Authority Inc. is doing social-media compliance spot checks on some of its member firms. In a notice posted Monday on Finra’s website, the regulator said it wants broker-dealers to identify the sites used by a firm, as well as all individuals who post or update the firm’s content on social-media sites.

Financial advisers can use live chat tools provided they first address compliance and productivity issues

Financial adviser websites can offer live chat tools for client and prospect communication.

As you visit more business websites online, you’ve likely noticed those pop-up windows in the bottom corner inviting you to a live chat. You can use live chat features for all sorts of things, including asking questions about a product, getting help from customer service, or simply submitting general feedback about a recent service experience.

Financial advisers can also leverage this trend in live chat communication with website visitors of all kinds, including clients and prospects.

This month’s column at Morningstar Advisor covers this trend that few advisers are taking advantage of today, but has the potential to be used by a much larger audience in the near future.

Read Live Chat for New Clients now to learn about out the compliance concerns of live chat as well as the issues of maintaining personal productivity in the face of potential distractions.

[I missed this story last week, but still feel it’s a good one for you. RIA in a Box carved out a great niche several years ago as the fast, turnkey way to get an RIA formed. Now the rapidly growing business continues to broaden its client base through strategic partnerships like this one with Trust Company of America. Even if you’re already an established RIA, RIA in a Box offers a range of ongoing compliance services from $99 to $399 per month. If that saves you at least two hours a month, you’re making money on the outsource relationship!] Trust Company of America, an independent technology and custody provider for RIAs, announced today that it has entered into a strategic alliance with RIA in a Box, the industry-leading RIA registration and compliance firm. RIA in a Box serves RIAs looking to start a career in the industry or break away from the wirehouse model.

[The place where I work (most of the time) has four walls, two windows, a desk, computer, and some office furniture. I bet the room where you work is not all that different. So does it make any difference that my room happens to be in my home? According to adviser performance consultant Angie Herbers, it doesn’t. She describes how the desire for more time with family or following a spouse in a move for a better job should not mean the end of employment with a successful advisory firm. In fact, Herbers’ example actually resulted in even stronger client connections without anyone ever stepping foot in a “traditional” advisory office.] One of the common lifestyle perks we get asked about is working from home. The technology explosion spilling over into financial advice has made working from home quite productive and profitable for many firms.

[In case you missed it, Fidelity announced it has vetted cloud desktop provider External IT for its advisers, giving them a fast track solution to leave legacy servers behind and move critical resources to the cloud. Pricing is around $150/month/user, so while it may not save advisers tons of money, it will give them greater mobility in business and better backup and disaster recovery.] In a press release today, Fidelity announced it has selected External IT as the exclusive provider of a cloud-based virtual desktop solution to financial advisers.

[Don’t think Twitter moves the stock market? Think again. One rogue tweet from a hacked AP account sent the Dow plunging nearly 150 points in a matter of seconds. What’s your takeaway from all this? Vigorously guard your online credentials, because attackers will do everything they can to get them and then exploit them for financial gain.] The AP Twitter hack which sent the stock market briefly crashing was caused by a phishing attack, according to the AP. The news organization now says the attack on Twitter was “preceded by a phishing attempt on AP’s corporate network.”

[Social media archiving provider Erado continues to grow quickly. You’ve read here before about its relationships with firms like LPL, the largest independent broker dealer ranked by revenue as wel as account assets.] Erado, the nation’s leading compliance and archiving firm in electronic communication, announced today their record first quarter growth. Erado added new services for over 500 offices, and continued hiring due to its continued growth. The quarter was the strongest in the company’s history.

[Pershing is not one to flaunt news of new integrations, so here’s a rare example of the company taking a bit more public stance on new partnerships. Here, Pershing now integrates with adviser-favorite CRM Redtail, particularly to push contact information in CRM to Pershing forms. This is useful when prospects are tracked in Redtail, then after some time, are converted to clients. Instead of manually filling in account forms, or using a third-party service like LaserApp, Redtail can now push data directly to NetX360. The fewer points of failure in technology systems, the better!] Pershing LLC, a BNY Mellon company, today announced a significant innovation in its industry-leading NetX360 platform through its relationship with Redtail Technology, a provider of web-based Client Relationship Management (CRM) solutions. Pershing’s integration of Redtail’s solution into NetX360 is designed to help advisors onboard clients more quickly, easily and efficiently.

[The days are over of maintaining a compliance manual printed out in a three-ring binder sitting on the COO’s bookshelf. Today’s modern office demands more flexible systems, including a higher-tech compliance manual. It’s surprising that it’s taken until 2013 to achieve this, but hey, compliance isn’t exactly cutting edge.] Simply put, Policy Architect is meant to help both registered investment advisers and those affiliated with a broker-dealer stay compliant by allowing for more frequent updating of a firm’s compliance manuals (it helps, of course, if you keep yours digital as opposed to cutting down trees for a binder).

[Have bad cell coverage, but still need to dictate meeting notes from the road? Now Mobile Assistant has an iPhone app to facilitate this process. It’s not the first dictation service to support a mobile app (CopyTalk did it several months ago, starting this arms race), but definitely is a useful feature to all of the Mobile Assistant users who ever experienced a dropped call or two in the middle of dictations.] Mobile Assistant, the professional quality voice-to-text dictation service for the financial, insurance and sales industries, announces the release of its iPhone Application, TALK IT, this week. Mobile Assistant’s TALK IT is a high quality transcription service and an alternative to inaccurate automated voice-to-text solutions on the market, appealing to financial advisors and insurance agents as an easy way to accurately and securely document client meeting notes.

This week, a registered rep’s YouTube video on annuities lands him in hot water.

My lesson learned from this week: Completely block out a few days each month in my calendar for rescheduling events. Things don’t always go according to “plan,” so it’s a lot easier when I have a few unscheduled days available in the future rather than try and compress existing commitments to squeeze in a rescheduled event.

[So a registered rep for First Heartland Capital, Inc., Ralph William Hicks Jr., created and posted videos to YouTube about equity index annuity (“EIAs”) seminars. FINRA alleged that Hicks’ marketing materials, including the YouTube videos, “presented oversimplified claims which omitted material information, or failed to provide a sound basis for evaluating the facts.” So what’s your lesson in all of this? If you’re going to market on YouTube (or any online site), you’d be better off avoiding specific details about products, including annuity guarantees and risks, and rather address general financial planning principles or opportunities NOT linked with particular products. But if you do mention products, you probably ought to provide a conspicuous link to disclosure material at a minimum.] While registered with First Heartland during approximately 2009 through 2011, the AWC alleges that Hicks disseminated to some 200 to 1,000 members of the public: advertising and sales literature to the public in YouTube videos; invitations to seminars and workshops; and letters concerning, among other things, bonus incentives.

[Bruce Colin, CFP® provides an honest, unbiased review of the new edition of Technology Tools for Today’s High-Margin Practice, updated by Joel Bruckenstein and David Drucker featuring multiple contributions from a variety of authors (of which I am one). Read Colin’s review for the best chapters of the book and why this edition is “required reading” for advisers. You can buy a copy using this affiliate link or just search for it on Amazon.] Required Reading for Tech-Savvy Planners: Latest Drucker-Bruckenstein book disappoints in some areas, but still worth the investment.

[Nexus Strategy founder Tim Welsh makes a (first?) guest appearance at InvestmentNews to cover the programs and applications most used by financial advisers. Data for this article was obtained from the 2013 InvestmentNews Technology Study. But one opportunity for improvement: avoid burying the lead.] The overwhelming success of the independent-adviser segment is transforming the financial services industry. With over $2 trillion in assets, independent registered investment advisers continue to be the fastest-growing segment and as a result are attracting investments by technology firms to penetrate this growing marketplace.

[In this recap of February’s Technology Tools for Today conference, Joel Bruckenstein covers the biggest trends observed: data security for financial advisers, protecting mobile devices, ramped-up custodian technology, touchscreen interfaces, and Windows 8.] The interest in security among independent advisors seemed to have ratcheted up. Perhaps it’s because major custodians have acted to heighten advisor awareness of attacks, or it could be increased media coverage of Chinese hackers targeting U.S. websites – but either way, it was one of the key questions for attendees at February’s Technology Tools for Today conference.

[Streamlined form filling is almost a required technology for the progressive advisory firm. Laser App is the 800-pound gorilla in form-filling software, so it’s imperative that other technology vendors integrate with them in some way. Here’s the latest CRM integration from Salentica, the Microsoft Dynamics CRM overlay provider for financial services. They’re still tiny with respect to their user base among advisers, but supporting integrations such as this will help boost its adoption in the marketplace.] Salentica Inc., a market leader in providing innovative Client Relationship Management (CRM) and Client Reporting technology solutions for the wealth management industry, announced today the general availability of its integration with Laser App within its CRM software.

Consolidating Two Systems

Typically, advisers who use online file sharing services to exchange documents with clients and prospects maintain two separate systems in their back office.

One system is the online file sharing service that does just that; facilitates file sharing with individuals outside the adviser’s network infrastructure.

But most advisers then maintain a second system that satisfies the record-keeping requirements imposed by the SEC and FINRA. Two systems are necessary, because consumer file sharing services (i.e. Dropbox) just aren’t built with the regulatory record-keeping requirements in mind.

For advisers using ShareFile Archiving for Financial Services, two systems should no longer be necessary to satisfy the record-keeping requirements.

A Document Management Solution?

With the addition of Archiving for Financial Services, is ShareFile now a contender among document management providers?

I believe the answer is no.

Archiving for Financial Services is a very useful addition, and it will eliminate the need to run two separate systems to facilitate file sharing and to maintain adequate record-keeping systems. But document management requires more than just indexed, auditable, and searchable records of client communications.

Document management systems offer metadata tagging and document profiling for every record stored in the system, and automated workflow is also frequently supported.

So for advisers who lack a true document management system (and surveys consistently show that there are a large number of such firms), ShareFile combined with Archiving for Financial Services is a convenient way to get two features from the same product.

But for firms already using document management systems with native record-keeping compliance, Archiving for Financial Services is unnecessary.

Nevertheless, ShareFile’s ease of use and mobile device compatibility still makes it a strong contender for online file sharing with clients, prospects, and colleagues.

This week’s FPPad On Air guest is Ethan Eden, founder and CEO of Market76, and we’ll cover what’s new in CRM software and how his company’s product is different from the traditional systems with which advisers are familiar.

[Here are two solutions to the age-old question on social media: what should you post, and how do you keep posts compliant? First, RegEd now offers a library of pre-approved content suitable for social media (for those of you who constantly have a broker-dealer staring over your social media shoulder) and a broader range of words and phrases the program uses to scan social medial posts for potential compliance issues. What’s not to like?] RegEd, the leader of compliance technology in the financial services industry, announced today two major features, the social media content library and multiple-lexicons, as part of their Social Media Archiving and Surveillance solution, powered by Arkovi.

[In what essentially represents a top 12 list (Part 1 has 6 items) of tech related RIABiz stories of 2012, contributor Lisa Shidler recaps some of the major and minor trends that will no doubt play a growing role in how advisers manage and grow their business.] Our identification of big technology events that happened in the past year starts with Salesforce, Junxure, Techfi, NetX360, IAS and MoneyGuidePro. As we move toward number one in our second installment, the names in many cases become less familiar, not more so, which indicates just how fast RIA technology is moving.